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AOL's social strategy: Merge Bebo, AIM, all else

AOL People Networks chief Joanna Shields lays out the ambitious and still-forming strategy to make the $850 million acquisition of Bebo worth it.

AOL has been fairly criticized for its purchase of Bebo in 2008 for $850 million. Since the acquisition, Bebo has been rolled into a group at AOL called People Networks. As we wrote yesterday, Bebo now has spiffy new features. But that doesn't make it worth $850 million.

I sat down with Joanna Shields, president of AOL People Networks, about the division's longer-term strategy. Shields was brought in by Bebo's venture investors to "package and sell" the company, she told me. She obviously did that, and quite capably.

"We sold at the top of the market," Shields said. She's stayed there to make the acquisition pay off for AOL, and there are clearly a lot of people who are curious about her plans for doing so.

The goal for the People Networks group, which includes Bebo, AIM, ICQ, SocialThing, Yedda, and Goowy Media, is to "connect people with everything they care about," Shields days. Before she came to AOL via the Bebo acquisition, she says the various social properties in AOL were operating as islands. To an extent they still are, but she's trying to bring all the pieces and parts together into a system that's useful for people, and that will pay back for AOL.

That goal to connect people explains why the team is evangelizing the social aggregation features of Bebo so strongly. People are on a lot of networks, not just Bebo. Shields realizes, though, that becoming another social aggregator is not the ticket to riches. It's useful, but you don't become Facebook by aggregating Facebook.

Joanna Shields Rafe Needleman / CNET Networks

AIM is the key
For the native audience that can drive Bebo and AOL forward, the company will rely on AIM and ICQ. AIM, which has 94 million global users, should have been AOL's social network, I said to Shields and to David Liu, GM of AOL People Networks and the leader of the AIM project. "It should have been our Twitter, too," Shields said.

As AOL announced yesterday, AIM users will be getting Bebo's more developed profile pages. In April an "integration version" of AIM will be released that will combine the AIM and Bebo instant messenger networks. Mid-year, a "revolutionary" new AIM will emerge that will allow access to not just AOL's own instant messaging clients, but others as well. I told Liu I use Adium on my Mac and Digsby on my PC (both are apps that support multiple instant messaging platforms, including Facebook's), and he told me that the new AIM client will be able to replace those. Also, "We'll have a better version of Twitter inside it," Shields said.

Shields indicated that there are no more social service acquisitions coming, so it looks like AOL will be building these new services with the people and companies it already has.

Liu told me that one of the key factors to AOL's future social success is the desktop client. "I can't say enough about how strategic it is have the client." Shields added, "It's that always-on pulse. It's a multiplier."

The group will continue to support both Web-based and mobile AIM clients, but they believe that having the rich client app is vital to staying in front of users.

AOL's People Networks group is aiming for openness. "We want to out-open everybody," Shields says, and indicated that upcoming products will support both OpenID for login and OAuth for third-party access. I did note that some of the products announced yesterday weren't completely integrated even with AOL's own products (the Life story function doesn't read in items from the Lifestream, for example), and she admitted that the integration among the different groups and products is a work in progress.

Worth $850 million?
Before talking with Shields and her team, I felt that AOL's Bebo strategy was scattered: I saw a lot of feature improvements, but no knock-out vision. After talking to Shields, I'm still not convinced that AOL has a killer social strategy.

The company is doing the right thing by finally trying to leverage its strong instant message platform, AIM (and also ICQ) and by taking good features from Bebo and layering them in to AOL. It's also smart to make Bebo and AOL more interoperable with other networks. These are solid moves and should help keep the AOL social products relevant.

But none of what I heard sounded like a threat to Facebook in terms of users, or to Twitter or Friendfeed in terms of innovation.